Apple Struggles Millions Of iPhones Returned As Investors Call For Tim Cook To Be Dumped

Written by David Richards     23/04/2013 | 07:44 | Category: INDUSTRY

The one time darling of the tech industry Apple, who this time last year was celebrating after their stock smashed through the $600 market, is set to announce a poor result by Apple standards with some media suggesting that the USA Company is already looking to replace CEO Tim Cook.

Apple Struggles Millions Of iPhones Returned As Investors Call For Tim Cook To Be Dumped
Tomorrow will be a defining day for Apple who is tipped to announce a big slump in revenue as consumers start to move away from Apple products to a new generation of Android smartphones, tablets and products like the all new Toshiba Ultrabooks.

Apple's shares are now worth just $376 having fallen 44% during the past few months. Net profits for the March quarter are predicted to have fallen $9.5 Billion.

This is no small dip and there is no sign that Apple has found a new product to stimulate the Company, even their TV project appears to be suffering under pressure from the likes of Samsung and LG

The Apple growth story began to go pear shaped the arrival of the iPhone 5 that was plagued with problems, overnight it has emerged that Apple has returned at least five million and perhaps as many as eight million iPhone 5's  to manufacturing partner Foxconn due to defects in either appearance or operation. 

First there were claims that iPhone 5 cases scratched easily then came "Mapplegate". The error-ridden mapping application was seen as a sign that Cook did not have his predecessor's attention to detail. Heads rolled in his first bloodletting since taking charge, with the guillotine falling the software chief. Scott Forstall.

Now there are signs that sales of the iPhone 5 - billed as the biggest consumer electronics launch in history, reaching 100 countries in three months - are falling more quickly than for its predecessor, the 4S, according to analyst Peter Misek at Jefferies bank.

He claims that in the first three months of this year the iPhone 5 sales accounted for only half of the Apple phones sold. Apple will have sold 37m handsets worldwide in the March quarter.

"Nobody seriously thinks there is going to be some collapse in Apple's business; the concern is how much bigger it will get," says Benedict Evans at the Enders Analysis research firm. "The company grew at over 50% a year for almost three years and, on a purely mathematical basis, the growth rate was going to slow."

Apple charges top dollar. While the brand accounts for just 11% of handsets bought, its premium prices mean it takes 60% of all profit in the industry, with the rest going to Samsung, says Evans. With many of the high spenders in western markets already Apple customers, the company may have to discount to reach a wider audience.

Apple founder Steve Jobs had a healthy disdain for Wall Street in a TV interview last year Cook revealed that Apple co-founder Steve Jobs advised him to never wonder "what would Steve do?" 

 Some Wall Street sources close to Apple executives claim that the Company is looking for a new CEO.

Some investors assert privately that it's time for Apple to oust Cook. Under his tenure Apple shares rose to an all-time peak last September, but they have since been cut nearly in half.

At least one of them believes there's a move by some at the company to search for someone with credible credentials and superb tech qualifications to take over and turn things around, lest Apple go the way of Hewlett-Packard.

The real issue confronting Apple is the big slowdown in growth and whether the slowdown will continue. 

Some observers estimate that revenues in 2013 will rise about 14%, way down from last year's 45% increase. Sales of iPhones and iPad's will drive much of that gain. And he figures that sales of Mac computers will also decline, in part due to cannibalisation from tablets, including the iPad.